Question

1. 2. 3. During 2022, its first year of operations as a delivery service, Flounder Corp. entered into the following transactions. Issued shares of common stock to investors in exchange for $137,000 in cash. Borrowed $55,000 by issuing bonds. Purchased delivery trucks for $63,000 cash. Received $18,000 from customers for services performed. Purchased supplies for $6,600 on account. Paid rent of $5,900 Performed services on account for $10,700. Paid salaries of $26,700. Paid a dividend of $11,500 to shareholders. 4. 5. 6. 7 8. 9. Using the following tabular analysis show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced, see Illustration 3-4 for example.) Q

Answer 1

Assets No. Cash + + Supplies + Equipment + + + Dividends Explanation + + + + + + + + + + + + + + + + + + + + Shareholders' Equity Retained Earnings Service Expenses Revenue $0 $0 $0 $0 $0 $0 $18,000 $0 $0 $0 $0 $5,900 $10,700 $0 $0 $26,700 $0 $0 $28,700 $32,600 + + Accounts Receivable $0 $0 $0 $0 $0 $0 $10,700 $0 $0 $10,700 Liabilities Accounts Bonds Payable Payable $0 $0 + $0 $55,000 + $0 $0 $0 $0 $6,600 $0 $0 $0 $0 $0 $0 $0 $0 $0 $6,600 $55,000 + 1) $137,000 2) $55,000 3) -$63,000 4) $18,000 5) $0 6) -$5,900 7) $0 8) -$26,700 9) -$11,500 Bal. $102,900 + Common Stock $137,000 $0 $0 $0 $0 $0 $0 $0 $0 $137,000 + $0 $0 $0 $0 $6,600 $0 $0 $0 $0 $6,600 + $0 $0 $63,000 = $0 $0 $0 $0 $0 = $0 $63,000 + $0 Issued common stock $0 Equity not affected $0 Equity not affected $0 Service income for cash $0 Equity not affected $0 Rent expense $0 Service income on account $0 Salary expense $11,500 Dividends paid $11,500 + + + + + + + + + + + + + + + + + + + + + + + + + + + + Cash Accounts Receiv; Supplies Equipment Total Assets $102, $10,700 $6,600 $63,000 $183,200 Accounts Payable Bonds Payable Common Stock Retained Earnings Total liabilities and shareholders' equity $6,600 $55,000 $137,000 -$15,400 $183,200 --> Matches with Total Assets to satisfy the accounting equation.